March 20, 2003	Thursday	Muharram 16, 1424

PARIS: Long after US consumers have gone back to nibbling French cheese, swigging champagne and donning French fashion, one industry will still be feeling the backlash from France’s opposition to US policy on Iraq.

Continental Europe’s largest defence firms, EADS and Thales, have been quietly building up their presence in the United States in recent years, striking joint ventures with US counterparts in the hopes of gaining better access to the world’s most lucrative arms market.

But experts on both sides of the Atlantic now say this slow but steady progress looks sure to be thrown into reverse, a casualty of the diplomatic strains between Paris and Washington.

“The current fracas is likely, very likely, to have serious consequences for European defence firms, especially EADS and Thales,” said Gordon Adams, director of security policy studies at George Washington University’s Elliot School of International Affairs and a leading expert on transatlantic defence issues.

For Franco-German EADS, the parent of Toulouse-based plane maker Airbus, the consequences of being shut out of the US market are strategically significant.

Although the firm does not do a large amount of business there now, the United States has been a key priority for EADS as it strives to lessen its reliance on the civil aerospace market and a dwindling German defence budget.

EADS collaborates with leading US defence contractor Northrop Grumman in unmanned reconnaissance planes and struck a deal last year with Boeing Co. to work together on ballistic missile defence systems.

EADS is also teaming with United States contractors on the Deepwater programme to modernize the US Coast Guard’s aircraft, ships and communications systems.

Experts believe these forays across the Atlantic could be compromised in the current environment.—Reuters